If you’re moving on to a new business, you may be thinking of selling your trademarks or copyrighted work to generate some extra cash. But in order to sell the rights over your Intellectual Property to another owner, you need to formally assign the rights with the appropriate government office.
Of course, the first step is that you must be the sole owner of the intellectual property (or sell it in conjunction with the other owners). If you’re going to keep using the trademark or copyrighted works, you’ll need to seek permission from the new owner to use the work in the future (perhaps by having them license it back to you).
Here’s how to transfer your intellectual property ownership:
TRADEMARK There are a variety of reasons why you may want to transfer ownership of your federally registered trademark (e.g. business acquisition or reorganization). Ownership of a pending trademark application or registration initially vests with the applicant. However, the owner of an application or registration can transfer, or assign, title over the trademark by following two steps:
a. Documenting the transfer between the parties, and
b. Documenting the transfer with the United States Patent and Trademark Office (“USPTO”).
Before you can document the transfer with the USPTO, you are required to have a signed trademark transfer agreement laying out the terms of the transfer. You can then go to the USPTO’s online form to record the assignment.
If you fail to properly transfer ownership of your trademark, and the buyer of your trademark infringes another person’s trademark, you may be pulled into the dispute because you still own the trademark (at least according to the USPTO).
Also, if you purchase the right to a trademark and never record the transfer with the USPTO, you may end up in a dispute over ownership with the prior owner.
The transfer of an unregistered mark (protected by common law, or state law) or a trademark registration or application must also be accompanied by the goodwill associated with the mark. The goodwill of a trademark represents the recognition that the mark has with customers and the earnings power that it generates (i.e., consumers want to buy from you because they recognize your name and brand). If goodwill is not transferred, the assignment is deemed ineffective and the trademark may be abandoned.
If you registered your trademark with a state, you must also remember to register the transfer of your state registered trademark as well. Registration information can be found on your state’s Secretary of State website.
COPYRIGHT Ownership of a copyright is first held by the artist or creator, unless that person was an employee or the work fell under the limited “work for hire” exception (which requires a signed writing). If you’re buying the copyright over a work, you may want to search copyright records to determine the current owner of work, as part of your due diligence.
If you want to transfer title in the copyright, you must do so in a signed written document.
You are not required to notify the United States Copyright Office when you transfer title in a copyright, but documents evidencing transfers can be recorded with the Copyright Office, whether or not the transferred copyrights are registered.
Although recording the transfer with the Copyright Office is voluntary, recordation provides certain benefits. First, a future court will take “constructive notice” of facts stated in the recorded document if the work is registered and the document specifically identifies the work such that it would be revealed by a reasonable search under the work’s title or registration number.
Second, you’ll get priority over another party claiming copyright ownership if there are conflicting transfer.
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